Lineage Cell Therapeutics, Inc. (AMEX:LCTX) Q4 2025 Earnings Call Transcript

Lineage Cell Therapeutics, Inc. (AMEX:LCTX) Q4 2025 Earnings Call Transcript March 5, 2026

Lineage Cell Therapeutics, Inc. beats earnings expectations. Reported EPS is $0.004, expectations were $-0.04333.

Operator: Welcome to the Lineage Cell Therapeutics Third (sic) [ Fourth ] Quarter 2025 Conference Call. [Operator Instructions] An audio webcast of this call is available on the Investors section of Lineage’s website at www.lineagecell.com. This call is subject to copyright and is the property of Lineage. And recordings, reproductions or transmission of this call without the expressed written consent of Lineage are strictly prohibited. As a reminder, today’s call is being recorded. I would now like to introduce your host for today’s call, Ioana Hone, Head of Investor Relations at Lineage. Ms. Hone, please go ahead.

Ioana Hone: Thank you, Jamie. Good afternoon, and thank you for joining us. A press release reporting our fourth quarter and full year 2025 financial results was issued earlier today, March 5, 2026, and can be found on the Investors section of our website. Please note that today’s remarks and responses to your questions reflect management’s views as of today only and will contain forward-looking statements within the meaning of federal securities laws. Statements made during this discussion that are not statements of historical fact should be considered forward-looking statements, which are subject to significant risks and uncertainties. The company’s actual results or performance may differ materially from the expectations indicated by such forward-looking statements.

For a discussion of certain factors that could cause the company’s results or performance to differ, we refer you to the forward-looking statements section in today’s press release and in the company’s SEC filings, including its most recent annual report on Form 10-K filed today. We caution you not to place undue reliance on any forward-looking statements, which speak only as of today and are qualified by the cautionary statements and risk factors described in our SEC filings. With us today are Brian Culley, our Chief Executive Officer; and Jill Howe, our Chief Financial Officer. I’ll now hand the call over to Brian.

Brian Culley: Thank you, Ioana, and good afternoon, everyone. We appreciate you taking the time to join us on the call today. We have a great call planned highlighted by recent warrant exercises that further extend our runway and a positive result for our initial go/no-go development milestone in our islet cell research initiative. I want to start by reminding everyone that we have a significant number of employees who live and work in Israel. And while our manufacturing facility is not located near a metropolitan center, some of our staff do commute from larger cities. Their safety is our top priority, and we are, of course, monitoring the situation. To date and as expected, a few employees and employee spouses have been called into military service, which is similar to what we’ve experienced and successfully navigated in 2023.

We cannot know what the future holds, but thanks to the incredible dedication of the team we’ve hired, our operations are continuing, and we expect things will continue to progress. Thank you also for the many messages of concern and support I’ve received from our colleagues and shareholders alike. Moving ahead, as many of you know, cell therapy has revolutionized oncology saving lives and creating tremendous shareholder value. But the use of cell therapy in oncology is maturing, while the application of cell therapy the fields outside of cancer remains in the early stages. For this reason, we are focused on delivering the next wave of innovation and value creation in this emerging branch of medicine. We’ll begin with the exciting results seen from our lead program in geographic atrophy as a testimonial to what cell therapy is capable of.

And as that program matures, we have begun turning our focus to how we can apply our manufacturing success and the lessons we have learned from the OpRegen program to evaluate other medical conditions that also arise from the loss of critical cellular function. Our focus on replacing cells that have become dysfunctional or destroyed may fundamentally reshape many treatment and recovery paradigms. And based on our conviction that the OpRegen program has the potential to drive future value, we believe we are uniquely positioned to capitalize on opportunities to develop other kinds of mature differentiated cells for patients, which, in our view, could lead to clinical outcomes currently beyond the reach of conventional approaches. Our work was productive last year, highlighted by us achieving the first milestone under our Roche and Genentech alliance, entering into a funded research collaboration for preclinical development of ReSonance, which is our first internally developed product candidate, and more recently, the launch of our new islet cell research initiative, something which I will provide an update on later in the call.

But first, I want to discuss 2 developments in particular from last year that reinforce our confidence in the company’s long-term outlook and which helped shape our plans for 2026. First, after relying on just 7 clinical sites for more than 2 years, Roche and Genentech have somewhat suddenly opened 10 new clinical sites in the GAlette study in the past 9 months, including one announced earlier this week at Duke Eye Center. While we don’t have any guidance to share on the timing of any additional trials or data disclosures, we view this surge of site openings as a favorable sign because this activity could support preparations for later-stage trials. And as I’ve shared on prior calls, there are other actions and readouts that have occurred in the past year that similarly suggest positive forward progress of OpRegen could be underway.

The second item we enjoyed last year were the enhancements and milestones we hit with our manufacturing platform, AlloSCOPE. AlloSCOPE purposefully stands for Allogeneic, Scalable, Consistent, Off-the-shelf, Pluripotent Cell Engineering. This acronym highlights the key elements of our core technology. Many of you are familiar with the challenges of autologous cell therapy, such as its high manufacturing cost and donor variability. But with AlloSCOPE, we address those challenges by using the same source cell line for all patients built on a platform we believe is capable of scaling into millions of doses and trillions of cells. This is something that has long been aspired to or sometimes even promised by the field of allogeneic cell therapy.

But to our knowledge, very few companies, possibly none, have actually shown that they can perform a large-scale pluripotent cell production process in a GMP setting and use that resulting material in an FDA-cleared clinical trial. But here at Lineage, we successfully established a GMP master cell bank from which we established a GMP working cell bank and generated product that has been used in the clinic. And because the hundreds of vials, which comprise those banks are identical, we are confident that we can successfully repeat the process as many times as needed. We believe this achievement provides credible evidence that the AlloSCOPE cell banking system we built is capable of generating millions of vials of our product candidate. This is no small achievement because it’s easy to say you plan to rely on the self-renewing capability of pluripotent cells to generate Phase I trial material.

But with complex biologics like cell therapies, the process is the product. So if your early clinical process isn’t capable of satisfying commercial scale, then you’re developing product candidate that won’t be able to supply the market. This is an essential but often overlooked aspect of cell therapy product development and requires certain investments and commitments to occur in the early stages. As a company with many years of experience in this field, we have had the time to make these investments. This also explains why we embrace the mantra of better from the beginning. We strive to only initiate programs that have a clear line of sight to commercial scale and other critical product features. And from these 2 significant developments, specifically, the evidence supporting OpRegen’s potential advancement by Genentech, along with the successful demonstration of commercially viable pluripotent cell production, we have developed the conviction to apply our platform to the furtherance of developing other cell-based products with the potential to treat various diseases and conditions.

I will say a few things about our recent and planned pipeline development later in the call. But first, I want to briefly review the status of our lead programs, OpRegen for dry AMD with geographic atrophy, OPC1 for spinal cord injury and ReSonance for hearing loss. OpRegen is the most advanced program in our pipeline and serves as a critical case study for our approach to cell transplantation. Dry AMD with GA is an increasingly established indication but suffers from underwhelming treatment options. Initial reports from our Phase I/IIa clinical study included improved anatomy, halting of atrophic progression and improved vision in patients with dry AMD and were unprecedented at the time. And from Roche and Genentech’s additional analysis of our Phase I/IIa data, it has been observed in a single dose of OpRegen cells can provide visual improvement lasting for at least 3 years among patients who received the cells at the target location.

This is an exceptionally promising finding because dry AMD is a condition that has not been shown to self resolve and only leads to worsening vision. Equally importantly, 3 independent groups pursuing RPE transplants have recently reported short-term outcomes similar to ours, providing further evidence in support of this novel mechanism. Although data remains forthcoming from GAlette, Roche and Genentech’s ongoing Phase IIa study, it is encouraging to see that our partners have continued to expand the retinal communities exposure and experience with OpRegen. As a reminder, GAlette is a surgical optimization study designed for approximately 60 patients. This study has been running for 3 years and is an open-label study for which all primary and secondary outcome measures are captured in 90 days.

So we infer that Roche has collected and reviewed long-term data from patients treated in that trial, which we expect has informed their recent site expansion decisions. Specifically, after adding only a single site in 2024, Genentech suddenly increased its pace and opened 9 new clinical sites in 2025, bringing this study to a total of 17 unique locations, including the new site just added last week. In addition, Genentech previously acquired novel and proprietary surgical delivery devices from a competitor and sought and received RMAT designation for OpRegen. We believe these are all positive indicators that support our expectation of Roche and Genentech’s continued advancement of the OpRegen program. And in December, Lineage received its first $5 million payment from the achievement of a development milestone, highlighting our contribution to this process.

When you aggregate these and other publicly available actions, we believe they point to a positive future. And while OpRegen reflects a new technology, we believe we have a set of attributes including scalable manufacturing, proprietary delivery tools, long-term safety and efficacy data and a world-class partnership that adds abundant clinical insights and commercial capabilities. For these reasons and others, I hope you’ll appreciate why we are so bullish on the potential for OpRegen to capture the multibillion and still largely unaddressed GA market. And also, while we are taking steps to try to recreate this promise with other cell types. Moving to our next cell type, oligodendrocyte progenitors, we are developing OPC1 an off-the-shelf cell transplant designed to increase mobility for people who suffered from a spinal cord injury.

OPC1 has been administered in 2 Phase I/IIa — excuse me, Phase I/II safety trials in sub-acute patients and the long-term safety and efficacy data we have collected so far is both promising and worthy of further investigation. We currently are enrolling patients in the DOSED study, the third clinical study of OPC1, which is evaluating the safety and novel — of a novel and proprietary system to deliver ourselves to the area of injury without stopping patient ventilation. In addition to testing the safety and performance of the new device, we also will be collecting functional assessments on all patients, giving us the opportunity to investigate any signals of efficacy that may arise. This is important because last year, we treated our first ever chronic SCI patient.

That was an important milestone because chronic injuries represent an additional and larger potential addressable population for this experimental therapy. And unlike subacute patients, many chronic patients have reached a functional plateau, making any physical improvement easier to detect and rely upon. DOSED is an open-label study and that first participant, I mentioned recently had their 6-month safety follow-up visit with no significant safety events reported following treatment. Equally important, the device performed as planned, which provides significant derisking of the device that we plan to employ in a larger trial. Last month, we expanded DOSED to the Greater Los Angeles area by opening our second clinical site at the Rancho Research Institute in conjunction with Rancho Los Amigos National Rehab Center.

Jill and I have the pleasure of hosting Dr. Charles Liu, the principal investigator and his team for dinner a few weeks ago, and we are extremely excited to have their group involved with the OPC1 program. Moving next to ReSonance. This is an auditory neuronal cell transplant being developed to treat hearing loss and also marks our first internally developed program. One of our goals during 2025 was to strike deals which partly or completely funded existing product candidates. We accomplished this goal through the partnership we announced with William Demant Invest, which is expected to fund all planned preclinical development for the ANP1 program up to the IND stage. ReSonance was an important test for our business model because it demonstrated that we could conceive of and successfully manufacture a completely new cell-based product candidate on our AlloSCOPE platform in a rapid and efficient way.

With a modest investment, we were able to generate new intellectual property and advanced ReSonance into preclinical testing within one year. This early data was sufficient to establish a partnership with a world-leading hearing health care company, which also brought us access to specialized technology, auditory experience and a network of hearing health leaders. We believe this collaboration was an important demonstration of the speed, efficiency and return on investment that the AlloSCOPE platform can provide and evidence of our ability to replicate our OpRegen collaboration success with another cell transplant program. I next will spend just a moment on AlloSCOPE to provide context to my upcoming remarks about our new islet cell initiative.

AlloSCOPE describes a platform on which we can bank and scale pluripotent cells to great numbers before differentiating those cells into discrete types of cells of the human body. It delivers what we consider to be the table stakes necessary to create a commercially successful allogeneic cell therapy, and it is being applied by us across multiple programs and cell lines. AlloSCOPE is a proprietary differentiation and production platform on which our cell-based products are derived from a single initial cell line, conferring consistent, cost-effective and scalable production. These features should enable us to support the production of millions of doses of a consistent and cost-effective cell-based product. Using AlloSCOPE, we have successfully completed a cGMP production run from our 2-tiered cell banking system for 2 of our product candidates, one of which has been utilized in the clinic.

This achievement is notable because it demonstrates our ability to scale a process with the purity, potency and regulatory quality required to support clinical use, a standard, which we believe sits beyond the reach of many companies and which can become a valuable differentiator for Lineage. With that background provided, I’ll remind you that the human body is comprised of about 200 discrete cell types. And because pluripotent cells can become any of those 200 cell types, we have many choices about where to deploy our resources into the development of additional potential product candidates. When thinking about where we might generate the greatest value from our process development and directed differentiation expertise, we recently announced a new research initiative in Type 1 diabetes and specifically, an opportunity we saw to address a major obstacle to a successful Type 1 diabetes cell transplant treatment.

We’ve been getting a lot of questions about our entry into this space. So I’m going to take your time today to walk you through our plans in some detail. The headline is that we met our initial internal go/no-go development milestone, which means we will continue to our next phase of internal development. Now I need to explain why that’s important. We already know that islet cell transplants can work. Dozens of patients are functionally cured each year using islet cells from cadavers, meaning they can regulate — patients can regulate their blood sugar without proactive and daily disease management. However, a major unsolved problem is supply. Cadavers cannot support a commercially viable source of islet cells. Immunosuppression, patient eligibility and hypoimmunity are all additional hurdles that need to be overcome, but we believe the elephant in the room is that we know of no company that can make islets at the scale required for a commercial product.

And we believe the greatest value in the islet cell transplant space will accrue to whoever solves that scale problem. The explanation for this gap is that the required dose of islet cells may be as high as 1 billion cells per patient, but mature islets do not expand readily in culture. Meanwhile, our calculations indicate that commercial viability begins in the range of thousands of doses per batch, implying that commercially relevant processes will have to be done on the scale of at least an 80-liter bioreactor. But carrying out a differentiation process in an 80-liter vessel requires feeding that vessel with billions of undifferentiated stem cells, which retain their full flurry potency capability and their genetic stability. And that is the problem.

Conventional 3D expansion introduces excessive passaging, risking loss of control and genetic aberrations but generating billions of cells required from conventional 2D approaches, demands in practical surface areas and high aseptic risk. There is unavoidable conflict and trade-off between having reproducible control and scale. Our strategy has 2 aspects. The first is to use the AlloSCOPE platform to combine the control advantages of 2D culture with the volumetric efficiency of 3D systems or what we refer to as 5D engineering. And I’m proud to report today for the first time that we have actually achieved this milestone and reduced it to practice multiple times at 0.5 liter scale, successfully reaching our first go/no-go decision point with this initiative.

We’re now evaluating whether we can translate this capability to the next step up into a multi leader vessel. Demonstrating reproducible performance at an even larger scale is the next step on the path to feeding 80-liter bioreactors of scale, which should be capable of producing thousands of therapeutic doses of islet cells per run. Importantly, this work is all being done pre-differentiation, which means this stage of development is not dependent on finalizing our immune suppression strategies. The second important aspect of our strategy is that we are looking to tackle the bioreactor feeding problem first. We are inverting the traditional development paradigm by focusing on the scale-up of undifferentiated cells, first, because once you’ve shown that you can actually produce your material at scale, we believe the risk profile for the rest of the islet cells project changes materially.

That’s because we already know that islet can be an effective intervention and have been shown by multiple groups to be successful in preclinical and clinical settings. Similarly, editing strategies and differentiation protocols already exist and provide risk-reducing information in those areas. And we may be able to leverage that information if our scale initiative is successful. But no one yet has shown that they can scale islets. We think it’s far more prudent to focus first on the unresolved scale problem rather than performing years of expensive studies and deferring the issue of scale for later. Our strategy doesn’t fit easily onto a bumper sticker. But if we wanted to print one, it might say better from the beginning. That is how I describe our development philosophy.

We enter fields only when we can see the entire path from cell banking through commercial delivery. We look to identify clear go/no-go decision points along the way and we strive to include improvements or solutions to existing methods, processes, delivery or to the cells themselves in order to have the best overall product profile. I’ll conclude by saying that our platform generates assets which share certain essential traits in common, so that each dollar we spend on innovation may apply across multiple programs. While each product candidate is, of course, intended for a different condition and each cell line behaves in a unique manner, the early steps of banking, process development, control purity and scale have somewhat common features in the way we apply them, which allows us to expand the scope of our pipeline without losing the focus required to succeed in each indication, and uses our capital in an efficient way.

I hope that it helps explain our exciting business update. And with that, I’ll turn things over to Jill for a review of our financials.

Jill Howe: Thanks, Brian. Before presenting our financial results, I want to address some points that may have caught your attention. The reported net loss for the full year is approximately $45 million higher than in 2024, this increase is mainly due to noncash charges linked to our rising stock price over the year, which resulted in higher warrant liability. Additionally, we incurred a noncash charge relating to an asset we acquired in 2019, which we elected to no longer develop. You may have also noticed that the reported cost for — OpRegen costs are higher this year. This is due to a standard accounting treatment applied when recording the expense associated with our downstream obligations after we received the first milestone from Roche and Genentech.

If you look at the expenses without this cost, the OpRegen developmental expenses were lower year-over-year. As of December 31, 2025, our overall cash position was $55.8 million, which together with the approximate $5.4 million in proceeds from warrants exercised this March is expected to support our planned operations into Q2 of 2028. This is a significantly higher runway than we guided to during our last call, with the biggest contributors being the $21 million in gross proceeds received from an ATM block trade in November, the warrant exercise of $5.4 million this week along with the achievement of the first $5 million milestone under our Roche collaboration. This revised guidance also does not take into account any other potential sources of funding, including additional milestone payments we are eligible for under our Roche collaboration, or any additional partnerships, which we may elect to enter into in the future.

Separately, a large additional source of potential capital is the approximately $32 million remaining of underlying warrants priced at $0.91 per share, which is below our current trading price and which gets accelerated if Roche or Genentech publicly disclosed their intent to advance OpRegen into a clinical trial with the comparator arm. Now I will review our fourth quarter and full year results. Total revenues for the fourth quarter were approximately $6.6 million, a net increase of $3.7 million as compared to the same period in 2024. The increase was primarily driven by higher collaboration revenue recognized under our collaboration and license agreement with Roche, following the achievement of the first milestone, along with the new research collaboration agreement with WDI.

Total operating expenses for the fourth quarter were $13.2 million, an increase of $5.2 million as compared to the same period in 2024. R&D expenses for the fourth quarter were $8.2 million, an increase of $4.8 million as compared to the same period in 2024. The net increase was primarily driven by $2.1 million for our OpRegen program expenses and $2.7 million for our preclinical and other undisclosed programs. G&A expenses for the fourth quarter were approximately $4.8 million, an increase of $0.4 million as compared to the same period in 2024. The net increase was primarily driven by personnel costs. Loss from operations for the fourth quarter was $6.5 million, an increase of $1.4 million as compared to the same period in 2024. Other income expenses for the fourth quarter reflected other income of $2.2 million compared to other income of approximately $1.9 million for the same period in 2024.

The net increase is primarily driven by exchange rate fluctuations related to Lineage’s international subsidiaries. No warrant-related financing transaction costs incurred as compared to the prior year’s quarter, and this was partially offset by the noncash quarterly fair value remeasurement expenses of the warrant liabilities. The net income loss attributable to Lineage for the 3 months ended December 31 with a net income of $0.9 million or $0.04 per share compared to a net loss of $3.3 million or $0.02 per share for the same period in 2024. Next, I’ll spend a few minutes reviewing the full year operating results. Total revenues for the year were $14.6 million, an increase of $5.1 million as compared to the same period in 2024. This increase was primarily driven by higher collaboration revenue recognized under the Roche agreement following the achievement of the first milestone along with new research collaboration agreement with WDI.

Total operating expenses for the full year were $51.2 million, an increase of $20.2 million as compared to the same period in 2024. This increase is primarily driven by $14.8 million of expenses recognized during the year for the loss on impairment of the intangible asset related to the VAC platform. R&D expenses for the full year were $17.7 million, an increase of approximately $5.2 million as compared to the same period in 2024. The increase is primarily driven by $1.6 million for our OpRegen program, $0.7 million increase for ANP1 program and $0.2 million for our OPC1 program and $2.8 million for our preclinical programs and other undisclosed programs. G&A expenses for the full year were $18.5 million, an increase of approximately $0.3 million as compared to the same period in 2024.

The net increase was primarily driven by $0.2 million in personnel costs and $0.1 million for services provided by third parties. Loss from operations for the full year was $36.6 million, an increase of $15.1 million as compared to the same period in 2024. Other income expenses for the full year reflected other expenses of $32 million compared to other income of $2.9 million for the same period in 2024. The net change of $34.9 million was largely attributable to the noncash fair value measurement expense of the warrant liabilities of $37.9 million, primarily due to an increase in our share price as compared to the prior year period. This increase in expense was partially offset by exchange rate fluctuations related to Lineage’s international subsidiaries and lower warrant-related transaction costs incurred as compared to the prior year in connection with the November 2024 financing.

The net loss attributable to Lineage for the year ended December 31, 2025, was $63.5 million or $0.28 per share compared to a net loss of $18.6 million or $0.09 per share for 2024. The difference was primarily driven by the noncash fair value remeasurement of the warrant liabilities and the loss on impairment expense related to a 2019 acquisition. Our financial results continue to reflect our ongoing dedication to responsible fiscal management, and we remain focused on balancing our cost of capital with the investments we make to grow and strengthen our pipeline. Let me hand the call back to Brian for concluding remarks.

Brian Culley: Thanks, Jill. I’ll quickly summarize by repeating 2 key themes. First, we continue to remain confident in the potential for OpRegen to drive positive clinical outcomes in dry AMD and we’re encouraged by our partner signs of commitment to the program. We also believe the independent evidence generated by others RPE cell transplant trials supports and elevates our replace and restore philosophy. Second, we’re preparing for a successful future by making new investments in our cell transplant platform and using our recent manufacturing innovations as a foundation from which additional pipeline programs can be advanced either by a funded partnerships or independently. We believe our approach offers powerful optionality, which we consider essential for a company at our stage of growth and development. We appreciate your support and belief in our vision. With that operator, we are prepared to take analyst questions.

Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Joe Pantginis with H.C. Wainwright.

Joseph Pantginis: Actually, Brian, I have 3 questions, a strategic one, a technical one and probably a question you can’t answer. So first, on the strategic question, I mean, you have many ongoing programs now with specific cell types, and you also have this broader AlloSCOPE program with pluripotent cells ready to go. How do you look to potentially translate, say, over the longer term with regard to business development strategy around all your various options?

Brian Culley: Thank you, Joe, for the first of those 3 questions. Again, excellent business development team. Clearly, I can point to the Roche and Genentech transaction. I can point to the Demant deal. And of course, these are just things that you’ve seen. It is normal and common for us to have other interactions, maybe deals that could come together but don’t for various reasons. So they’re a reliable and productive group. What we can do, what we have the opportunity to do is to take the AlloSCOPE platform and apply it in different ways to generate a basket of assets. And then we can make some decisions that are good for the company in terms of partnering or retaining. We don’t have a particular objective to launch any of the products we manufacture, although that’s certainly not off the table either.

We are really being mindful of our cost of capital, the spending, the risk and our own capability to make decisions about what and whether to partner and what time, assuming that there is an appropriate economic arrangement to be struck at all. So I think the way to maximize the value of the platform that we have developed is in part to generate new assets that can be partnered fairly early and to use some of that capital to offset our needs to rely on traditional capital markets and through that mix of creating assets that are funded by others as well as adding programs and taking them a little bit further. I think we may be solving to optimize for the best return on invested capital that we can with the technology that we have developed here at Lineage.

Joseph Pantginis: That’s extremely helpful. And then I guess my technical question is without giving away the secret sauce here. For the islet cell component that you’re working on here, what would you consider to be the rate-limiting step or steps with regard to moving beyond the 0.5 liter scale?

Brian Culley: That’s an excellent question and the very nature of the exploratory work is that we do not know. So we cannot predict the linearity of going from half liter to multi liter to ultimately up in the neighborhood of 80-liter or 300 liters. There are incredible new technologies that are available that help companies with this work, but it’s very difficult to say. I would say this, though, I do think going from 0 to a 0.5 liter was a much larger achievement than what I expect going from a 0.5 liter to 2, 3, 4 liters will be. And the reason for that is that it hadn’t been done before and as I explained earlier on the call, it’s very hard to get the control that you want from a 2D process and apply it into the scale of a 3D process.

So to be clear about one thing here, AlloSCOPE describes our basic platform, our banking or manufacturing. AlloSCOPE 5.0 is the application where we’re essentially tricking cells to think that they’re being grown in a 2D environment while actually putting them in a 3D environment. So quite simply 2 plus 3 equals 5, perhaps the additional dimensions are scale and cost in that situation. But I think what’s really exciting about the next step is that if you do have control in the lower mid-leader scale, you really could begin to have discussions about pooling that output and feeding maybe an 80-liter reactor or it could give you some insights and confidence about the linearity as you scale. Not every cell line is going to be amenable and can adapt to these larger scales and perhaps some of the technologies don’t fit well depending on the cell type that you plan to differentiate.

So it’s very much unexplored territory, which is why I wanted to spend a lot of time talking about it today.

Joseph Pantginis: Very helpful. And then I think we’re essentially done because I think the next one is unanswerable, as I said. But with regard to the GAlette study, I’m sure you get questions on this all the time. But is there any visibility or anecdotes you could provide with regard to the types of deliveries that Roche might be testing or methods?

Brian Culley: There have been some presentations at conferences where images of different devices have been provided. I don’t know in every case whether those presentations have been made available to the public online or are they exclusive to the registrants of these conferences. But what I would say as a general matter is that the 2 big chunky approaches are to deliver [ transvitreally ] through the front of the eye or via a suprachoroidal approach, which is going around the eye and accessing the subretinal space from below. They have trade-offs. I won’t go through all of the trade-offs right now, but that is just one basic way of looking at delivery to the subretinal space. Within that, there, of course, are more refined approaches regarding the kinds of needles or the methods that one uses.

But if you were to pull up or request from us the 2025 CTS desk — slide deck, I think some examples of some of the technologies that Genentech acquired are available. But this is an important reminder. This is not — the study that they’re doing is a surgical optimization study. So they’re going to be looking at different cohorts of patients and evaluating what works well. So they may try some things that don’t go well and abandon those, and that’s appropriate. They may find some things that seem to go well and want to push the envelope, and that’s also appropriate. In fact, desirable. But this is not a responder analysis. So there — it’s not some number out of 60 is a success threshold. We know that you get the best results if the cells go to the subretinal space.

So of course, it is obvious and appropriate to try and simplify that as much as you can before moving into and committing to larger trials. So we’re hopeful that everything that has happened is an indication that, that work is going well. I think if that work we’re going clearly poorly, they’ve had abundant time to abandon this initiative, but we also remain confident that our partners know best how to find the right level of risk and reward moving as quickly as they can while not jeopardizing their leadership position in the space.

Operator: Our next question comes from the line of Jack Allen with Baird.

Jack Allen: Congrats to the team on all the progress made over the course of 2025. Looking forward to a productive 2026. Just 2 quick questions from my end. The first one is on the OPC1 program. I was hoping if you could provide some more color on the timing of the functional measures? And anything you can also add as it relates to the baseline characteristics of that first participant in the study there being a chronic participant. I’m curious as it relates to their baseline functionality. And then secondly, on OpRegen. I know you guys have presented 3-year data in the spring of 2025. I’m curious if 4-year data could be on the docket as it’s been great to see the continued durability response as it relates to OpRegen.

Brian Culley: Thank you, Jack. I will ask your second question of our partner. I do not know their plans for 4-year data. But obviously we are excited by the fact that the benefits that we’re seeing in year one did continue into year 2 and year 3, which mechanistically makes sense for a transplant that is not rejected. We think that’s a great sign, especially because the untreated eye in the same patient continues to lose letters of vision. So the delta, the clinical benefit and the confidence in that benefit only seems to get better with each passing year. With respect to OPC1, we do — I do want to remind everyone that the OPC1 study is a safety and performance study of a device. So it is not an efficacy design. So we have a more limited set of function measurements that we are collecting.

But we are collecting things like an E-ISNCSCI exam and quality of life measures, SCIM is one of the tools that we’ve — one of the assessment tools that we’ve employed in this trial. So we collect baseline data or screening data prior to the cells being administered and then we have some early functional assessments probably too early to see anything. So these are functional assessments that occur in the first 90 days. They provide some reinforcement or reliability about your baseline measures and ensure that the patient isn’t experiencing any decline. And then we wait until a year in most cases because we aren’t looking every 30, 60, 90 days at these patients because, again, that’s not what the study was designed to do. But when we collect the 1-year functional assessments, if we do see some changes, those are things that perhaps would be more meaningful if they’re occurring at 12 months versus occurring at 3 months or even 6 months.

There is, quite interestingly, there has been some information. We view this information as coming from a reliable source, but there was some information about the chronic patient having some improvement in certain measures. This is anecdotal. This is not part of our conveyance of clinical data to the public, but people are free to talk about their own experiences on clinical trials. So you may find some evocative information out there. We don’t confirm or refute it. We will only be communicating actual data from our trial when it becomes available. But I would add only to your specific question that the patient fits within our specific criteria as being ASIA Impairment A. And I guess I could add to that, that we had some difficulty finding the next patient in the stagger.

And we recently went through an expansion of the protocol to allow a second impairment level of A for the second patient enrolled in this study. So to the extent that we hadn’t enrolled a second patient yet, I can tell you that it was because it was really hard to find the stagger that had been agreed to with FDA. So we went through the steps to amend that protocol stagger to broaden it to allow for another A to be treated, and we have someone who has been identified and may get treated here in the coming weeks this month. So I think we’re going to be back on track with this trial, but very good and appropriate questions, Jack. Thank you for them.

Jack Allen: Awesome. Maybe if I can just follow up one more on AlloSCOPE. But before I do, it’s great to hear about the anecdotal progress of the OPC1 program, while it’s not necessarily well-vetted clinical data. There’s a high unmet need in spinal cord injury. So that’s great to hear that there’s some enthusiasm there. On AlloSCOPE, I just wanted to ask very briefly how you think about ramping expense of that program as you move up from the half liter bioreactor, I know if you get more expensive as you move into larger reactors, how are you planning to contain cost there?

Brian Culley: Yes. It’s not too difficult. The cells are eating the media that we feed them, and we have done a lot of batches and the multi-liter batch size, I’ve spoken frequently about OpRegen already being manufactured at a 3-liter scale. So we have abundant experience at that scale. I think where it starts getting really exciting is when you go up one level beyond, I don’t want to get ahead of myself at this point. There still are risks and uncertainties associated with this. But one of the really powerful attributes of our approach of inverting our development plan and focusing on manufacturing is that we are able to put a relatively modest amount of capital to work to get answers as to the scalability of these lines. If we were doing it the other way, if we were doing expensive animal studies or very expensive human studies, and we were deferring the important questions around scale, we would be spending a tremendous amount of money running studies that others have already shown can be successful and not necessarily proving anything about our viable product candidate in terms of its ability to meet the commercial demand.

But if instead, you follow the Lineage approach and you say, well, I’m going to answer the question of scale first, then you are looking at the risk profile of your subsequent preclinical and preclinical studies with a little bit of a different view because you already know you can make a lot of your material. So I really like the overall approach. I think it’s prudent. I think it’s investor friendly. And from our perspective, we have experienced a lot of experience already at a single leader or multi leader scale production. So we have a well-trained team that can fill and finish vials out of that scale in a GMP environment. So we’ll have to see. But as Jill said, we’re very committed to high returns on our invested research dollars and trying hard to maintain something close to our historic investment of capital on an annual basis.

Operator: Next question comes from the line of Mayank Mamtani with B. Riley Securities.

Mayank Mamtani: Thanks also to your company employees and their families in Israel. So Brian, just to piggyback on the last — kind of framing you had on this inverted risk framework you have on the scale-up of the manufacturing first for this islet cell research initiative. Could you maybe just double-click on what have been the learnings to date from the OpRegen work since inception and also as part of specifically the Roche partnership? And maybe also if you could recap what milestones should we be watching for potential candidate being identified here? Or is this being used by a strategic partner since obviously this would draw a lot of interest? And then I have a follow-up.

Brian Culley: Thank you, Mayank, for that multipart question. Yes, the inverted risk, I think, as I say, attractive because we’re putting what I believe is the least expensive and most challenging step first. And so we’re trying to invert the risk profile of islet cell transplant product initiative or campaign. The specific learnings and lessons from the OpRegen program are coupled with independent learnings and lessons we have because, of course, we have other programs that we’ve had to solve different problems for whether that’s our hearing loss program or our spinal cord program. Altogether, a lot of these have taught us some clever and sometimes patentable material and insights. Overall, I would say that AlloSCOPE is comprised of 3 components.

There are physical or engineering-type components. So these are the physical properties of how we do the manufacturing. There are biological aspects to it, i.e., exactly what we expose the cells to and when. And then you have an engineering component, which is a little bit more of like the know-how. So it is not that there’s a magical molecule that makes AlloSCOPE work or a special coding of plastic or type of plastic that makes everything click. It is the combination through years, in fact, decades of experience coming together, finally being able to show that this capability can legitimately make millions of vials, as I said, trillions of cells and then applying it in a very unique way to solve a specific problem in the setting of islet cells.

I don’t envision that being a fee-for-service business of our company. I’ll never say never because our job here is to create value, it’s not necessarily to make medicine. So if we see an opportunity and it makes sense, we may pursue it. But what we would envision with AlloSCOPE in partnerships is always enjoying significant ownership of any program that’s going forward. We are bringing tremendous value to partnerships. We’re a healthy company that can carry its own weight in development. And so we want to make sure that we’re never viewed as a CDMO, not that there’s anything wrong with that business, it’s just very hard to price that kind of product when the probability of success is unknown as you go into those alliances. And we also have limited GMP space, a very highly trained team.

This is not up the shelf skill set that we just grabbed from some recent college grads. So it is something that we have to be very selective where we apply our technology. But you also asked a very important question in there, which is additional programs, and it occurs to me now in this moment that I have previously said that we had some additional cell types that we are going to talk about and it didn’t even make it into my prepared remarks, which gives you a sense of how much exciting stuff is happening here. But we do have plans to reveal another new cell type, that could be as early as in the next 3 to 6 weeks. It’s coming together. It’s maturing. I’m very excited about it. But it is as yet undisclosed. But hopefully that is something that we could have out into — out for public consumption prior to our next quarterly call.

Mayank Mamtani: Yes. No, that new cell type would be great to learn about that. Thank you for that level of detail. And then on the OpRegen program, if that was to theoretically start a Phase III tomorrow, like, what’s your capacity for the amount of doses you can provide because these could be like very large trials, at least historically that have been done. And do you have any visibility of regulatory interaction that has occurred beyond the RMAT designation that was secured last year or 2 years ago?

Brian Culley: Thank you for that additional question. Unfortunately, again, that’s a question that really can only be answered by Roche and Genentech. I am not a party to regulatory strategy discussions or regulatory interactions that they have regarding OpRegen. So I cannot say because I do not know.

Mayank Mamtani: Okay. And one last for Jill. In your cash runway, how much of the additional warrants are factored in? If you could just clarify.

Jill Howe: Yes. So of the existing runway that we talked through today, it only includes the $5.4 million in warrants that we collected this week on an exercise, sort of, the $32 million remaining is not factored into our future runway at this point.

Brian Culley: Mayank, I neglected to answer the remainder of your question. And I’m happy to say that perhaps one of the least of my concerns at this company is being able to manufacture sufficient material. It really speaks to the power of our technology. We literally are manufacturing more OpRegen than we can reasonably fill and finish in a day’s work. So I do not think that supply of clinical material will be gating because the 2-part banking system and then the production vessel scale that we’re at, really does generate a very large number of cells on each run that we perform.

Operator: Next question comes from the line of Albert Lowe with Craig-Hallum.

Gum-Ming Lowe: I was wondering how you’ll be applying the hypoimmune cell line that you recently received from the partnership with Factor? And I believe this is an iPSC line. Can you please also speak on some advantages of using induced pluripotent stem cell line?

Brian Culley: Albert, thank you for that question. The hypoimmune line that we obtained through our Factor alliance is a line that we designed for a neurological indication. That indication is as yet undisclosed. I may or may not — I think I’ll probably just say that I cannot confirm that it is even the same indication that I suggested could be coming out in the next 3 to 6 weeks. But you’re correct that it is an iPSC line. I don’t know if there are advantages of iPS over ES or vice versa. Our view is that it is appropriate to follow the data and the behavior of these lines. I do think that there is an important discussion that occurs about various attributes that may make one or the other more attractive but there simply have not been enough approved agents to be able to definitively say one is superior.

Typically, what one finds is it when you work with one form of a line, that is the line type or source that you defend for us, we are indifferent. We have both types of — excuse me, we have both types of pluripotent lines. But in this case, the experience that Factor had with gene editing, with iPS, with hypoimmunity and we also engineered in an additional functional, hopefully, relevant edit into that line. That is about us accessing capabilities that we think are valuable, but that we didn’t want to build in-house. And because ourselves are always fully characterized before they go into a patient, we can be confident that there are a number of different editing technologies that could be applied because we can always confirm [ materially ] as it was designed to be before we utilize it and before we invest in the scale-up of that material.

Gum-Ming Lowe: And looking forward to hearing about this new cell type that’s coming soon.

Operator: Next question comes from the line of Sean McCutcheon with Raymond James.

Yang Chen: This is Yang for Sean. We have one quick question. Could you speak to the process of getting a new OPC1 formulation into the DOSED study? And how much do you think that may shorten the time line versus bridging study? And are you in dialogue with FDA on that front?

Brian Culley: Thank you, Yang. Very appropriate question. We elected to separate the new device that we are testing from the new cells that we have manufactured. So we have completed the manufacturing — the new process by which we manufacture those cells. We have completed the comparability testing including in-life comparability testing and all the other features that go into a meeting package with FDA, but we have not yet presented or delivered that information to FDA to request us to bridge in those studies. We thought it would be prudent to get a little bit of experience with the new device so that then the focus could shift away from the new device and into the new cells. So what we are hopeful for is that the new device will perform as it was designed to be performing in the first 4, 5, 6 patients and then proposed to FDA that we would switch over to the lineage new process in the last handful of patients in the DOSED study.

If successful with that endeavor, that would save a lot of time. It would prevent us from having to establish and conduct a separate safety cohort with our new cells. So you can imagine that the bioinformatics data, the animal data, all of the analytical work that we have done to propose that switch has been exhaustive in order to give us the best probability of success in accelerating that process because it is correct that in order to run a larger study, our view is that we need to have this superior device deployed and we need to use our higher quality, higher purity, higher scale and better control OPC1 cells. And so that is our plan. And when that is complete, then I believe we would be in a position to run a larger study, either ourselves or in a partnership but a larger study of spinal cord injury patients.

Operator: There are no further questions at this time. I will turn the call back over to Brian Culley, CEO, for closing remarks.

Brian Culley: Thanks, everyone. I know it was long and complicated, but it’s very important, and I think also very exciting. So stay tuned. Clearly, we have some exciting stuff coming up not too far away. Thank you for your interest and support of the company, and we’ll talk again soon.

Operator: That concludes today’s call. Thank you all for joining, and you may now disconnect.